Why the Luxury Fragrance Industry is Thriving in 2025

The luxury business, on the whole, might be struggling with falling sales and declining profits for many of the big brands, but one sub-sector is bucking the overall trend with impressive growth and expanding markets. According to market analytics specialist The Niche Research, the global luxury fragrance market is expected to reach US$30.5 billion by 2034, with a very respectable growth rate of 6.8 per cent CAGR until then. Meanwhile, fragrance is also the fastest-growing category in the prestige beauty sector, with sales up 13 per cent in the first quarter of 2024, states market research firm Circana.

Interparfums produces and distributes more than 20 upmarket fragrances, and it experienced record sales of €396 million in the first half of 2023, an increase of 24 per cent compared to the same period in 2022. Its more luxurious lines enjoyed particularly strong growth with Jimmy Choo, Montblanc and Coach sales up by 44, 24 and 27 per cent respectively. Meanwhile, Spanish group Puig, with perfumes including Carolina Herrera and Nina Ricci, purchased a majority stake in cool, contemporary Swedish fragrance house BYREDO for, it is reported, nearly €1 billion in 2022.

Typical of the exciting new high-end fragrance houses that have emerged over the last few years is Maison Francis Kurkdjian. Its latest collections, Grand Soir and Petit Matin, take their inspiration from Founder Kurkdjian’s home city of Paris.

Ironically, the economic downturn experienced by many aspirational luxury customers that has, in turn, dented so much of the luxury sector, has benefitted fragrances, argues Dionne Officer, a research analyst at global market intelligence agency MINTEL. “It’s the lipstick effect — a theory that suggests consumers are more willing to spend on luxury goods that they view as small indulgences to lift their mood,” she says. “Fragrance is a highly gifted category, which further enhances its resilience during economic instability. Consequently, fragrances are likely to benefit from steady value growth, even as the cost of living crisis endures.”

But this latest boom in upmarket perfumes differs from previous periods of growth. One key factor is the role of young men this time around. A recent survey by investment bank Piper Sandler revealed that fragrance spending among teenage boys in the US had increased by 26 per cent between spring 2023 and autumn 2024. Inevitably, social media is playing an increasingly key role. Jatin Arora, aka “The Real Cologne Boy”, has approximately two million followers on TikTok and regularly chalks up around 60 million “likes” for his posts. The 18-year-old promotes fragrances by brands such as Jean Paul Gaultier, which can retail at around £800 a bottle — adding up to a lot of pocket money and Saturday jobs.

Daniel Schütz, also known as “Jeremy Fragrance”, has around 13 million followers on TikTok and Instagram combined, and he enjoys cult celebrity status among young men. Joining him is Tristan Rodriguez, aka “That Fragrance Kid”, who reviews brands such as Tom Ford and Bulgari and has nearly half a million followers — not bad for a 16-year-old. Meanwhile, “looksmaxxing”, the essential art of looking your best when you’re a teenage boy, is now being complemented by “smellmaxxing”, which requires thorough regular showering, vigorous deodorising and the application of copious amounts of cologne.

Another new development is the emergence of a range of new niche luxury brands alongside the big names. The Fragrance Shop, for instance, saw a 27.3 per cent increase in customers purchasing niche scents last year. “We’re seeing sustained growth driven by a younger, more diverse audience who view fragrance as part of their personal identity,” says the company’s Chief Marketing Officer, Rachel Goalby. “Digital innovation, such as virtual try-ons and discovery services like [subscription service] scentaddict, have also made luxury fragrances more accessible, changing how people discover and invest in scents."

Escentric Molecules is one of these newcomers. “Escentric Molecules was born from my fascination with how single aroma molecules evolve uniquely on the skin. I wanted to strip perfumery back to its essence,” explains Berlin-based founder Geza Schoen. “As a niche fragrance brand, our position allows us to focus on creativity, authenticity and innovation without the constraints often faced by larger corporate players. People today are looking for experiences that feel personal and meaningful, and fragrance is a powerful way to express those desires.”

Imogen Russon-Taylor, founder of Kingdom Scotland, the country’s very first fragrance house, worked in the aromatic world of luxury whisky for nearly 20 years before translating her knowledge into scent. “Kingdom Scotland is all about telling stories about the majesty of the natural world,” she says. “I learnt so much in the whisky world, from the finest ingredients to telling stories in aroma and taste.”

Russon-Taylor also offers bespoke “Scent Experiences” trips for wealthy consumers, such as international HNWIs visiting Scotland who want to experience more memorable experiences. “This offering approaches perfume in a very similar way that whisky companies deliver nosings and tastings,” she explains. Other noteworthy events have included entertaining guests for the 200th anniversary of The Macallan — Kingdom Scotland has collaborated with the whisky brand to produce a collection including two candles — and delivering Scent Experiences for guests staying at The Waldorf Astoria and The Balmoral and onboard The Royal Scotsman.

As luxury houses develop new fragrance products to extend their brands and drive sales in this difficult trading environment and niche brands emerge, traditional high-end perfume manufacturers are also upping their game — and welcoming the competition.

“Acqua di Parma views this development as a natural evolution,” says Paola Paganini, product development and innovation director at the Italian company. “We’re rooted in fragrance, but we have always embodied the art of living, creating products and experiences beyond scent to celebrate Italian sophistication and craftsmanship. This positions us as a versatile luxury brand that continues to set the bar for authentic and timeless elegance.”

Brands such as YSL, Chanel and Hermès are focussing on issues such as sustainability and more inclusive marketing campaigns along with the use of storytelling as they respond to evolving consumer values, according to The Fragrance Shop’s Rachel Goalby. “Genderneutral scents are gaining traction as consumers reject traditional notions of masculinity and femininity,” says Holly Hutchinson, perfume expert and founder of niche, luxury fragrance brand Memoize London. “Fragrance layering, combining multiple scents to create a personal blend, is increasingly popular, with brands offering complementary products for customisation.”

Technology is also playing a progressively important role, according to Hutchinson.  “AI tools are enabling brands to recommend scents based on an individual’s preferences or even their mood. This is bringing hyperpersonalisation to the market.” Scent-Sation is YSL’s in-store experience that uses neuroscience to provide personalised fragrance advice based on clients’ olfactory preferences and their emotions.

Working with the neurotechnology company Emotiv, YSL offers customers the chance to don a headset to create an electro- encephalogram (EEG), which reveals the scents that appeal to them. In a similar application of technology, Puig took 45 million brain readings from men aged 18 to 35 to help create its cologne Phantom by Paco Rabanne. This research saw the company add lavender and lemon to improve the fragrance.

Creating fragrances is a millennia-old practice that works by activating some of the most deep-seated, primeval parts of the human brain to change our moods and stimulate attraction. Everyone has experienced a Proustian moment triggered by a smell. This deep-seated connection with the human psyche is why the fragrance industry offers luxury brands and niche perfumers such lasting — and lucrative — potential.